PROBLEM 1.) Exercise 10-9 As sales manager, Joe Batista was given the following

Question

PROBLEM 1.) Exercise 10-9

As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of SoriaCompany for the month of October.

SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2017

Difference

Budget

Actual

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

8,500

9,000

500

$2,210

$2,160

$50

935

900

35

3,740

3,600

140

2,040

990

1,050

8,925

7,650

1,275

1,900

1,900

–0–

1,100

1,100

–0–

900

900

–0–

600

600

–0–

4,500

4,500

–0–

$13,425

$12,150

$1,275

As a result of this budget report, Joe was called into the president’s office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.

Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs. Do not leave any answer field blank. Enter 0 for amounts.)

PROBLEM 2.) Exercise 10-4
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.

Fixed overhead costs per month are Supervision $3,800, Depreciation $1,700, and Property Taxes $500. The company believes it will normally operate in a range of 7,400–11,600 direct labor hours per month.

Assume that in July 2017, Myers Company incurs the following manufacturing overhead costs.

Variable Costs

Fixed Costs

(a) Prepare a flexible budget performance report, assuming that the company worked 10,200 direct labor hours during the month. (List variable costs before fixed costs.)
(b) Prepare a flexible budget performance report, assuming that the company worked 9,700 direct labor hours during the month. (List variable costs before fixed costs.)

PROBLEM 3.) Exercise 10-11

UrLink Company is a newly formed company specializing in high-speed Internet service for home and business. The owner, LennyKirkland, had divided the company into two segments: Home Internet Service and Business Internet Service. Each segment is run by its own supervisor, while basic selling and administrative services are shared by both segments.

Lenny has asked you to help him create a performance reporting system that will allow him to measure each segment’s performance in terms of its profitability. To that end, the following information has been collected on the Home Internet Service segment for the first quarter of 2017.

Budgeted

Actual

Prepare a responsibility report for the first quarter of 2017 for the Home Internet Service Segment.

SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2017

Difference

Budget

Actual

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

Sales in units

8,500

9,000

500

Favorable Variable expenses     Sales commissions

$2,210

$2,160

$50

Favorable     Advertising expense

935

900

35

Favorable     Travel expense

3,740

3,600

140

Favorable     Free samples given out

2,040

990

1,050

Favorable        Total variable

8,925

7,650

1,275

Favorable Fixed expenses      Rent

1,900

1,900

–0–

Neither Favorable nor Unfavorable      Sales salaries

1,100

1,100

–0–

Neither Favorable nor Unfavorable      Office salaries

900

900

–0–

Neither Favorable nor Unfavorable      Depreciation—autos (sales staff)

600

600

–0–

Neither Favorable nor Unfavorable        Total fixed

4,500

4,500

–0–

Neither Favorable nor Unfavorable Total expenses

$13,425

$12,150

$1,275

Favorable

Explanation / Answer

1). Solution :-

Dear Questioner, Post Question one by one, not in bulk

Particulars Budget Actual Difference Sale in Units 9000 9000 N Variable Cost :- Sales Commission($2210/8500)*9000 $2340 $2160 $180 F Advertising($935/8500)*9000 $990 $900 $90 F Travel Expenses($3740/8500)*9000 $3960 $3600 $360 F Free Sample($2040/8500)*9000 $2160 $990 $1170 F Total Variable cost(A) $9450 $7650 $1800 F Fixed Cost :- Rent $1900 $1900 N Sales Salaries $1100 $1100 N office Salaries $900 $900 N Depreciation - Auto $600 $600 N Total Fixed Cost (B) $4500 $4500 N Total Expense (A+B) $13950 $12150 $1800 F

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